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Exercise 7: WACCIChapter 14) Name ID: Date 1. Describe the three-step process for estimating WACC Corp. is issuing new common stock at a market pice of S28. Dividends last year were S1 30 and are expected to grow at an annual rate of 7 percent, forever What is Falcon's cost of common equity capital? 3. Bel ton Distribution Company is issuing a S1,000 per value bond that pays 7 interest that is paid semiannually and matures in 15 years. Investor are willing to pay $958 for the bond. The company is in the 18 percent marginal tax bracket. What is the firm's after tax cost of debt on the bond? 4. The preferred stock of Walter Industries Inc. currently sell for $36 a share and pays S2.50 in dividends annually. What is the firm's cost of capital for the preferred stock